Making a will

It’s win-win. Or in fact win-win-win. The people you love and care for get your property when you die. A charity gets a donation. And the Chancellor chips in nearly £20. The only person who may lose is your local solicitor. Because in November he or she will draw up a will for you for free.

It is called Will Aid and was the brainchild of Graeme Pagan a solicitor in Oban in Scotland.

"It was the time of Band Aid with Bob Geldof for the famine in Ethiopia and I thought if pop stars can do something why not solicitors?"

Since it began in 1988 Will Aid has raised £4 million for charity. The solicitor does the will free, but you make a donation to Will Aid. What you pay is up to you. But Will Aid recommends £65 for a will, £95 for ‘matching wills’ for a couple and £35 if you have a will but want to alter it with what is called a codicil. On average those donations are about the same as you would pay the solicitor and you can give more or less than the recommended amounts if you feel that is right. The Chancellor will then boost your charitable donation by £2.82 for every £10 you give, more than £18 on top of the £65 gift.

Not all solicitors participate in Will Aid. You can find those near you that do by calling the Will Aid hotline or through their website.

Before you visit your solicitor you should take a few minutes to prepare. Decide who you want to benefit from your estate. Make sure you have their full details with you. You will also need to name two people who will be your executors – in other words who will sort out your estate after your death. A solicitor or a bank can do this for you but they will charge hefty fees. People in your family who will gain from your will are probably a better choice. You should also be able to give some sort of estimate of your assets, including the value of your home, any money or investments, and any valuable property. Also think about any debts you may have. They will have to be paid from your estate before anyone else gets a penny.

If your assets are much above the limit for paying Inheritance Tax which is £263,000, the solicitor may say you need more advice than can be given free and arrange a separate fee with you. But remember, if you have to pay Inheritance Tax, especially if it is just on the value of your home, there may be little your solicitor or anyone can do about it. So make sure you are paying for something that is worthwhile.

Once your will has been drawn up and you have approved it you have to sign it in the presence of two adult witnesses. They must both be there at the same time as you sign the will, and sign that they have witnessed that. The witnesses do not see the contents of the will and they must not benefit from the will.

What if I don’t make a will?
Most people have not made a will. And it can cause tremendous problems and cost a great deal in legal fees. The law lays down who will get your property. And it may not go to who you want. Graeme Pagan has seen many problems.

"If you don’t make a will there can be endless arguments and if you have no relatives at all, then the Government gets it. It can be a nightmare from a lawyer’s point of view. For example, if you live with someone but are not married you have absolutely no rights at all. And it can be that a wife or husband re-appears after the partner’s death and takes over the family home. I have seen it happen. There can also be problems with small businesses. The son who works there expects to inherit, but other children come forward and want their share and that can bring the business to a sudden halt."

He also warned that the estate may never be divided if there was no will and many relatives with a claim

"I knew one case where one niece was visiting her aunt, dealing with her affairs but when she died – without a will – the niece knew there were about seven other nieces and nephews, some living abroad. They could not all be traced so the money is still sitting in the bank, unable to be paid out."

If you do not have a will the so-called rules of intestacy apply. They are very complex and different in detail in Scotland from the rest of the UK. Generally your property passes to people in order:- wife or husband, children, grandchildren, parents, brothers and sisters, more distant relatives. As Graeme said an unmarried partner – even one who has lived with the deceased for many years and is a parent of their children – is not in this list and has no right at all to inherit if there is no will. If no-one is found in these categories then the property goes to the Crown.

The person in the most complex position is, strangely, a wife or husband. Many people expect them to get the whole lot if there is no will, but they don’t. If there are children, siblings, or parents of the deceased who are also still alive, then the spouse only gets some of the estate and the rest is held in trust for their children or, if there are no children, the siblings and parents. That can mean for example that the marital home has to be sold to enable this division to take place. Children born outside marriage count equally with those born within marriage. If there is no spouse but there are surviving children, then they simply get the whole estate divided between them. If there are no children and no spouse then parents, brothers and sisters, and more distant relatives roughly in that order will benefit.

Sorting all this out will cost a lot of money and can take a lot of time. Meanwhile the relatives have to make sure that the home and possessions are kept safe and in good condition. Making a will avoids all that.It is not only people who have not made a will whose property can end up divided in this way. A will which turns out to be invalid is just the same as no will at all. So although you can buy a standard will form at a newsagent or download one from the web, you really should get professional advice of some sort to make sure that your will is properly drawn up and is validly signed and witnessed.

Sue Davison from Will Aid says that many of these online services are fine, but there are dangers "If you’re not in the same room as someone, then you don’t know the questions to ask yourself. A solicitor can alert you to things you might not have thought of. So even though many will writing services are run or checked by solicitors, they are not as good as visiting someone face to face with such an important thing as a will."

Especially as in November you can get such advice free. Or at least the fee is going to charity rather than a solicitor!

Tax
The biggest unintended beneficiary of your will may be the Chancellor. If you leave an estate of more than £263,000 then he will take 40 per cent of the rest. You can reduce this Inheritance Tax in several ways. First, give your money and property away and live for at least seven years. Such gifts are completely exempt from Inheritance Tax. But the gift must be absolute and you cannot benefit from the money, goods or property you have given away. So you cannot give your home to your children but still live there. Or rather you can, but the home would count as if it was still yours when Inheritance Tax was worked out. Second, you can give away up to £3000 a year in total without it counting at all. That exemption applies separately to husband and wife and if you did not use this facility last year you can give away twice as much this year. So between them a couple could give up to £12,000 in one year. Even if you die within seven years of making these gifts they do not count towards your estate.

Making a will is not morbid. We are all going to die at some point. And if you do not make a will then your home, your possessions, and your money may end up in the wrong hands. Look on it as a loving act for the people you care for. And of course for the nine charities that will benefit, here and in the developing world. They include British Red Cross, Help the Aged, Save the Children UK, and Sight Savers International.

More information:
Call Will Aid on 0870 606 0239. Or visit the Will Aid website
For more on reducing Inheritance Tax see ‘Leave your troubles behind’